Financial Daily from THE HINDU group of publications
Thursday, Dec 25, 2003
Financial Daily from THE HINDU group of publications Thursday, Dec 25, 2003 |
|
|
|
|
|
Home Page
-
Mergers & Acquisitions Corporate - Courts/Legal Issues I-T Dept `voids' transfer of shares from Shaw Wallace Breweries to SABMiller Boby Kurian
Bangalore , Dec. 24 THE biggest merger and acquisition deal in the Indian alcoholic beverage sector received a rude jolt with the Income-Tax Department declaring the transfer of shares by Shaw Wallace Breweries Ltd to SABMiller "as void". SABMiller, the world's second largest brewer had picked up 50 per cent stake and management control in Shaw Wallace Breweries for $133 million in May this year. The Kolkata circle of Income-Tax Department made the declaration on November 11 stating that Shaw Wallace Breweries Ltd (SWBL), which is a 100 per cent subsidiary of the defaulter Shaw Wallace & Co Ltd (SWC), transferred shares without approval under Section 281 of the Income-Tax Act. The section states that any transfer of an asset, including shares, by an assessee would be void if it is done when there are pending proceedings with the Income-Tax Department. A senior department official confirmed the development to this newspaper and added that "the company is yet to challenge" the declaration in a court of law for relief. The declaration came along with I-T Department's move to attach movable and immovable properties of Shaw Wallace under Section 281B for non-payment of dues amounting to Rs 450 crore. When contacted, SWC issued the following statement: "Your query pertains to some observations allegedly made by the I-T Department about the company's beer joint venture. To the best of our belief, the Income-Tax Department should be and is concerned with the company's tax dues and in respect of that, we would like to inform you that, there is no tax demand on the company that has not been stayed by the competent authority. Moreover, the company and the Department have already worked out a mutually acceptable payment schedule, which is being adhered to meticulously." It further added: "The investment in the brewery joint venture, Shaw Wallace Breweries Ltd, has been made in conformity with the law of the land in letter and in spirit. We have not encountered any objections to the joint venture by any regulatory body at any point in time and that is why the joint venture is in existence. We do not wish to say anything further on the matter." Speaking to Business Line, Mr Richard Rushton, Managing Director of SABMiller India Ltd, said the dispute was between SWC and the tax authorities and would be looked into by the former alone. "It sits with Shaw Wallace & Co and I will not comment on it," he added. A top-ranking SWC official on the condition of anonymity said the company was preparing to challenge the declaration on both technical and legal counts. He claimed there was no uncertainty about the future of the joint venture with SABMiller and all issues in this regard would be resolved soon.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|